I am not sure about the US approach that suggest government is covering 100%. If so that introduces a fresh moral hazard and next Fed rate decision just became tougher.

More to come.

Summary details courtesy of FT Mon Mar 13, 2023. For full details subscriber access is required.

UK

HSBC on Monday averted a crisis in Britain’s tech sector by rescuing Silicon Valley Bank’s UK arm, in a dramatic fire sale concluded after all-night talks with British ministers led by Rishi Sunak and the Bank of England.

HSBC emerged overnight as the leading white-knight bidder for SVB UK, with Noel Quinn, the bank’s chief executive, involved in the frantic talks with Sunak, currently in the US.

SVB UK has 3,300 UK clients, including start-ups, venture-backed companies and funds, according to people familiar with the bank, although many have deposits under the £85,000 threshold covered by the financial insurance scheme.

USA

US regulators said Silicon Valley Bank depositors would be fully repaid as they acted to shore up the banking system after the lender’s implosion, unveiling emergency funding measures and closing down a second financial institution.

The Federal Reserve announced a new lending facility on Sunday aimed at providing extra funding to eligible institutions to ensure that “banks have the ability to meet the needs of all their depositors”. The US central bank said it was “prepared to address any liquidity pressures that may arise”.

The Fed facility is part of a broader effort by regulators, including Treasury secretary Janet Yellen, Fed chair Jay Powell and Martin Gruenberg of the Federal Deposit Insurance Corporation, to avoid spillovers across the financial system and reassure customers that their money is safe following the second-largest bank failure in US history